November 27, 2017 / 1:36 PM / in a year

Polish regulator welcomes further consolidation of banks

WARSAW (Reuters) - Poland’s banking regulator has no intention of opposing further consolidation of the country’s commercial banks, the head of the Polish Financial Supervision Authority (KNF) said on Monday, calling it a “natural process”.

Marek Chrzanowski also said that the KNF will allow more banks to pay out dividends for 2017 compared to 2016, adding that the largest banks would likely get a green light to do so based on their performance in the first three quarters of this year.

“Consolidation is a natural process in the commercial banks sector,” Chrzanowski told Reuters in an interview. “If stronger entities take over weaker ones ... then these are changes going in the right direction.”

He said there seemed to be no serious risks in a possible merger of Poland’s second-largest lender Bank Pekao SA (PEO.WA) with smaller rival Alior Bank (ALRR.WA). Both are controlled by state-run insurer PZU (PZU.WA).

“If these two entities decide to merge, find synergies, then I do not see here any serious risk and arguments to oppose such a decision,” Chrzanowski said.

The head of KNF said it was important that a potential new owner of Deutsche Bank Polska, the Polish unit of Germany’s Deutsche Bank (DBKGn.DE), was “stronger” than its current owner.

Reuters reported in November that Spanish bank Santander (SAN.MC) has entered exclusive talks to buy the bulk of Deutsche Bank’s business in Poland. nL8N1NN3EG

Chrzanowski said Austria’s Raiffeisen (RBIV.VI) would meet its obligations of listing its Polish banking unit, Raiffeisen Bank Polska, if it decided to sell the unit to another bank that was already listed in Poland.

The KNF extended the latest deadline for the initial public offering in Raiffeisen Bank Polska by almost a year to May 15, 2018.

“But we have to remember that we have time until May 15 for a possible due diligence process and agreeing the terms of a deal,” he said. “Every investor entering our market should fulfill its obligations. We cannot create precedents.”

In November, Reuters reported, citing sources, that BNP Paribas (BNPP.PA) has approached Raiffeisen Bank International (RBIV.VI) to express interest in buying the Austrian bank’s Polish division.

($1 = 3.5236 zlotys)

Reporting by Pawel Florkiewicz and Pawel Sobczak; Writing by Marcin Goettig; Editing by Adrian Croft

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